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First Bauxite borrows US$10M, starts Bonasika mine build

Construction is underway at First Bauxite Corp.'s Bonasika bauxite project in Guyana after the company secured an additional US$10 million bridge loan from key shareholder and creditor Resource Capital Fund VI LP.

Bonasika is expected to be fully operational in the second half of 2019.

Resource Capital Fund VI also lent the junior US$5 million back in January. Combined, Resource Capital Fund VI and Resource Capital Fund V own a 45.19% stake in the company.

The second loan will comprise four installments over the coming months, the company said June 15, with an initial US$2 million advance able to be drawn on immediately.

The loan comes due either a year after the first draw down on the January loan or after an "event of default," whichever comes first, and bears interest at 10% per year. It would also come due if First Bauxite enters into royalty or streaming deals worth more than an aggregate US$25 million in connection with financing the project.

First Bauxite in May shifted its focus to direct shipping ore from processing a value-added aluminum product after a strategic review of a 2015 technical report, while deferring a decision on the development of a ultra high strength proppant production facility.

The company has received orders for bauxite ore, with shipments to Europe and China planned for June and September. It has approval from the Guyana government to ship up to 40,000 tonnes of ore in 2018 for product and market development.

In corporate material, First Bauxite outlines probable reserves of 4.9 million tonnes grading 58.81% aluminum oxide at its Bonasika 6 deposit, with Bonasika 7 hosting probable reserves of 4.8 million tonnes grading 57.50% aluminum oxide.